Credit Implications of Brexit
The UK's decision to leave the European Union has far-reaching credit consequences across all sectors and regions.
  • SUMMARY
  • REPORTS

  • SECTOR IN-DEPTH
    18 Nov 2019|Moody's Investors Service
    Brexit has been a catalyst for the UK government's increasing policy inertia, loss of policy predictability and diminished cohesion, all of which are reducing the country’s institutional strength. These conditions are affecting the operating environment for a range of UK government-related entities, banks and other debt issuers.

    CREDIT OPINION
    08 Nov 2019|Moody's Investors Service
    The UK government’s institutional strength has weakened, as illustrated by the increasing inertia and, at times, paralysis that has characterised Brexit-era policymaking. The UK’s debt burden is high and unlikely to fall, given growing pressures for spending increases, with little clarity on how they might be financed. Brexit-related uncertainty has led to slower growth in business investment, which weighs on growth rates.

    SECTOR COMMENT
    30 Oct 2019|Moody's Investors Service
    The European Council announced that it was willing to formally postpone the UK's departure date from the European Union until 31 January 2020. The delay prolongs the uncertainty, which will continue to weigh on spending, investment and hiring decisions in the UK for some time and is credit negative for an array of issuers both in the UK and the EU.

    SECTOR IN-DEPTH
    22 Oct 2019|Moody's Investors Service
    The UK Parliament’s vote in favor of a Brexit deal indicates a first step towards an orderly exit from the European Union (EU), even if it may not be possible for the UK to leave by the end of October. Under the deal, the UK’s exit would be followed by a transition period with the EU, which would likely bring more Brexit-related uncertainty.

    SECTOR COMMENT
    23 Sep 2019|Moody's Investors Service
    Brexit uncertainty has led to reduced housing market activity, a credit negative for the UK housing market, and by extension RMBS, because it lowers recovery values of defaulted loans.

    SECTOR IN-DEPTH
    10 Sep 2019|Moody's Investors Service
    Investment has weakened significantly, alongside worsening housing market and financial conditions. UK growth declined in Q2 2019 and the core inflation rate has stabilised in recent months. In a no-deal Brexit scenario, the UK economy could be permanently smaller than with a trade agreement.